quarterly results january march 2017 · 2017-08-24 · quarterly results january –march 2017 o2...
TRANSCRIPT
Quarterly Results
January – March 2017
O2 Czech Republic, a. s.
28th April 2017
Any forward-looking statements concerning future economic and financial performance of
O2 Czech Republic a.s. contained in this Presentation are based on assumptions and
expectations of the future development of factors having material influence on the future
economic and financial performance of O2 Czech Republic a.s.
These factors include, but are not limited to, public regulation in the telecommunications
sector, future macroeconomic situation, development of market competition and related
demand for telecommunications and other services.
The actual development of these factors, however, may be different. Consequently, the
actual future results of economic and financial performance of O2 Czech Republic a.s. could
materially differ from those expressed in the forward-looking statements contained in this
Presentation. Although O2 Czech Republic a.s. makes every effort to provide accurate
information, we cannot accept liability for any misprints or other errors.
Cautionary statement
2
Tomáš BudníkCEO & Chairman of the Board
Tomáš KouřilCFO & Vice- Chairman of the Board
Today’s speakers
3
Strategic commercial initiatives & Performance Highlights
4
Unlimited internet available to 99% of households…
… via DSL and LTE home technology …
…with guaranteed 20Mbps speed
Free-to-air distribution of selected content…
…full paid content and all features (incl. time shift)…
…provided via HbbTV technology
In 1Q 2017 we brought unlimited internet to all households…
…and expanded distribution of our O2 TV with free-to-air
5
Unique tennis channel launched in January 2017
…with focus on Czech players track…
… ATP and WTA tournaments exclusively; Czech Grand Slam matches
Our value focused strategy works, despite B2B pressures…
…two digit growth in mobile data, close to 700k O2 TV viewers
Mobile ARPU (y-o-y) Growing ARPU despite B2B pressure
Expected dilution due to negative impact
of roaming regulation since 2Q 17
Growing smartphone/LTE penetration…
… coupled with tariff upsell & data limit recharges…
…mobile data traffic growth up by 2/3…
…and data monetization accelerates
58% smartphone
penetration
36%LTE penetration
New record O2 TV viewers via all platforms
Partnership with leading breweries (> 1,200 pubs & bars)
O2 TV reach[1] (‘000)
[1] Tariff - IPTV, OTT, Multiroom (second STB), Multi-device (mobile & web application)
6
1,7%
1Q 17
240 256
331 426
Mar 16 Mar 17Paid tariff Multi-device
+20%>680
Growing mobile ARPU in Slovakia driven by strong data growth…
…new B2B service contracts signed
New corporate & public segment contracts signed…
… Sky Toll (national toll provider), Takko Fashion, Presov City
close to 250 contracts signed in both segments
LTE handset sales focus… with new instalment model
… data customer base +9% & traffic +54%...
and data successfully monetized (revenue[1]: +21%)…
… growing ARPU despite challenging competitive environment
57% smartphone
penetration
37%LTE penetration
Solid revenue[2] growth driven by data & phones
B2B entry dilutes EBITDA margin by 1.1 p.p.
Total EBITDA margin 32.5%[3]
Positive contribution to Group financials
[1] year-on-year growth rates in constant currency (EUR), [2] including O2 Business Services,, [3] including national roaming costs
Contribution to Group
(1Q 2017)
7
19%
Revenue
22%
EBITDA
2016 Shareholder remuneration
8
CZK 21 per share 2016 shareholder remuneration proposal…
…to be discussed at AGM on 10 May 2017
Regular
Dividend
DPS proposal: CZK 17
In line with dividend policy[2]…
… (98% of net profit)
Share Premium
distribution
Key dates
On top of regular dividend
Not one-off, but mid-term intention
Proposal: CZK 4 per share
Ex-date: 9 May 2017
Record date: 10 May 2017 (AGM date)
Payment date: 9 June 2017
Total shareholder remuneration
[1] distribution of 90% to 110% standalone net profit
17
21
4
Divi Share pr. Total
16
Divi
2015 2016
Total CZK 6,515m
9
General characteristicsFinancial PerformanceJanuary – March 2017
Revenue growth fueled by mobile data, O2 TV and hardware…
…while profitability slightly growing
Operating Revenue EBITDA
[1] including O2 Business Services11
CZK millions Jan-March 2017Change
1Q17 /1Q16
Operating Revenue 9,224
CZ Fixed 2,756
CZ Mobile 4,772
Slovakia[1] 1,730
EBITDA 2,533
EBITDA margin 27.5%
Net Income 1,286
Free Cash Flow 628
+1.2%
+2.1%
+3.4%
9 031 9 224
1Q 16 1Q 17
2,1%2 503
1Q 16 1Q 17
2 533
1,2%
1Q 16 Voice BB & Pay TV ICT Data Hardware Other 1Q 17
Limited fixed revenue decline…
… with B2B segment still under pressure
CZK millions
(% change y-o-y)
-37
(-5.3%)
2,828
-12
(-0.9%)-34
(-27.2%)
-2.6%
-15
(-5.5%)
-4
(-0.9%)
2,756
12
+28
(+49.0%)
[1] electronic sales reporting HW [2] termination of O2 Germany network monitoring contract
[2][1]
1Q 16 Voice Messaging Data Interconnection Hardware Other 1Q 17
Double digit data revenue growth…
… more than compensating B2B pricing & roaming impacts
[1] Key drivers: Data: +21%, Hardware: +29%; O2 Slovakia, growth rate in local currency (EUR)
CZK millions
(% change y-o-y)
-59
(-2.7%)
19,216
-39
(-16.5%)
-7
(-3.5%)
+3.0%
+46
(+15.3%)+178
(+15.3%) 19,339+19
(+3.5%)
+6.8%
Czech Mobile Revenue
Slovakia Mobile Revenue[1]
13
+80
We are starting up new business activities…
… with limited financial contribution so far
14
eKasa
Insurance
New legislation (12/2016, 3/2017, 3/2018, 6/2018)
… market leader after first two waves…
…one-off hardware revenue, recurring service fee
smart travel: the only postpay travel insurance on the market
handsets & tablets: for newly sold hardware
200k insurance policies milestone in only 18 months
Minor cash investments into advanced start-ups
Typically own O2 experience before investment
Not only financial contribution, but also O2 ecosystem
1Q 16 Costs of Service Commercial Costs Marketing PersonnelExpenses
NW & IT repairsand maintenance
Other 1Q 17
Cost base under control; with Czech costs flat year-on-year…
…while Slovak up 10% due to higher HW costs & roaming
[1] Taxes other than income taxes, provisions and fees, Rentals, Buildings, Vehicles, Consumables, Consultancy, Billing, Collection,
Call Centers, management fees and other; including Internal expenses capitalized in fixed assets
CZK millions
(% change y-o-y)
+9
(+0.2%)6,595
+42
(+4.7%)-24
(-4.2%)
+1.9%
-15
(-6.8%)
+5
(+3.2%)
[1]
+0.2%
15
HW costs: +110
6,719
+108
(+11.5%)
+10.2%
Call centers: -46
Insourcing
Commissions: -70 IT: -15
364
308
93
146
1Q 16 1Q 17
CZ SK
Low capex profile…
…investments directed to 4G rollout in SK & IT transformation
CZK millions
5.1% 4.9%
Slovakia:
4G rollout (also in rest of 2017)
2G own network coverage expansion
Czech Republic:
IT transformation (peak in 2H 2017)
CAPEX/
Revenue
16
8.4%
4.1%
12 000
9 000
3 500
Capacity Utilised31-Mar 2017
New capacity
17
New CZK 3.5bn debt successfully subscribed in April…
…to secure long-term financing needs
CZK millions
(CZK, 2020) (CZK/EUR[1], 2022/2024)
[1] CZK 3,000m, EUR 20m
CZK millions 31 Dec 2016 31 March 201731 Mar 17
/31 Dec 16
Non-current assets 22,071 21,781 -1.3%
- of which intangible assets 16,515 16,194 -1.9%
- of which property, plant & equipment 5,075 5,031 -0.9%
Current assets 11,235 13,730 +22.2%
- of which cash & cash equivalents 4,137 6,516 +57.5%
Total assets 33,306 35,511 +6.6%
Equity 17,505 18,543 +5.9%
Non-current liabilities 7,382 7,382 -0.3%
- of which financial debt 6,976 6,978 0.0%
Current liabilities 8,419 9,608 +14.1%
- of which financial debt 1 2,002
Cash accumulation for shareholder remuneration payment…
…additional CZK 2bn debt withdrawn
18